I think it is Kevin's character "growing up." Like he became more confident, and he no longer needed the puppet to speak out for him. The final scene with the girl was probably him thinking of asking her out, and from the look on his face, he was going to do it.

The cameras were not made or placed for a show like this. To me, this stage looks like the Just For Laughs stage in Montreal. It is usually used for stand up comedy, so the cameras were likely set up for that.